The Impact of ADAS on Insurance Totaled Cars

According to recent data, more than one fifth of all crashed cars are now deemed total losses by insurance companies. This is a significant increase from 1980, where only a small percentage of wrecks resulted in total loss. The rise in totaled vehicles can be attributed to the high repair costs associated with modern vehicles.

Increasing Repair Costs

The cost of repairing vehicles equipped with Advanced Driver Assistance Systems (ADAS) has skyrocketed. These systems, designed to prevent accidents, are now contributing to the rise in total loss claims. The complexity and expense of repairing ADAS components have led insurers to opt for totaling vehicles rather than sanctioning costly repairs.

Challenges with ADAS Repairs

Replacing sensors and cameras required for ADAS systems like automatic braking and lane-keeping assistance can add thousands of dollars to repair costs. Calibration and labor costs further escalate the expenses, making it financially unfeasible for insurers to approve repairs on vehicles with advanced safety features.

Impact on Electric Vehicles

Despite the high repair costs, electric vehicles (EVs) are totaled less frequently than combustion engine cars. However, as EV values decline, there is a possibility that the frequency of totaled EVs may increase. This poses a financial risk for EV owners who owe more on their vehicles than their current market value.

Future Outlook

Salvage auction companies like Copart are benefiting from the increase in totaled vehicles. As the proportion of totaled cars continues to rise, these companies are experiencing significant growth. The hope is that advancements in ADAS technology will eventually reduce the number of accidents, leading to a decline in insurance prices that have been steadily increasing.